While the cost of college rises each year, financial aid means an education doesn't have to be out of reach.
The FAFSA Application
The process of applying for financial aid begins with the Free Application for Federal Student Aid(FAFSA). Schools use this form to calculate students' income and assets and, in the case of dependent students, the assets of their parents. This information is used to determine the Expected Family Contribution (EFC), which is the standard by which federal aid is distributed.
Forms of Financial Aid
Federal loans let students borrow money to pay for college without having to worry about paying it back until after graduation. If students qualify for a subsidized loan, the government will pay all interest on the loan while the student is in college. Otherwise, interest will accumulate and be added to the total amount due. Federal loans must be repaid within ten years, although there are potential deferments. Private loans are offered by banks and other financial organizations, and the terms of these loans will vary. When it comes time to pay back student loans, consolidation is a popular option. Consolidation allows a person to combine multiple student loans under a single creditor, usually at a better interest rate than the original loan.
Awarded by the government, this form of financial aid is based on need and does not need to be paid back. Available grants include Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Academic Competitiveness Grants, and National SMART Grants.
Scholarships offer another opportunity to reduce the cost of college. With thousands of scholarships listed online, there's something for everyone. Organizations offer scholarships to students from diverse backgrounds and students pursuing specific majors. There are scholarships designed to reward academic achievement, leadership, community service, skills in a hobby or sport, and the potential to contribute to a profession. Many other scholarships are awarded by colleges. Contact your school's financial aid office to learn more about potential scholarship money.